Senior executives in the food and beverage industry see improved revenue and profitability this year and next, but caution that the jobs outlook in their sector will only gradually improve in 2011, according to a recent survey of C-level food and beverage executives conducted by KPMG LLP, the audit, tax and advisory firm.
Though they believe a full recovery for the sector to be a couple of years away, when asked to name the biggest drivers of their company's revenue growth in the next 1-3 years, execs most frequently cited product innovations (89 percent) and innovative merchandising strategies (82 percent) as their top two factors.
More surprising were the responses concerning recovery accelerators: Executives thought the increased use of mobile internet by consumers (39 percent) would most positively impact sector recovery, followed by increased online shopping (34 percent) and increased outsourcing of technical/business procedures (28 percent). Overcapacity of store space was cited by 30 percent of the respondents as having the most negative impact on sector recovery.
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Overall outlook
About two-thirds of executive respondents in the KPMG survey said their revenue and profitability were better now than a year ago. That’s in marked contrast to KPMG's survey of the sector last summer, when less than one-third thought these business measures were better than the previous year.
Regarding jobs, 39 percent of respondents were more optimistic about employment in their sector over the next year, which is seven percentage points higher than last summer's survey.
When it came to their specific hiring plans, while 51 percent of the senior food and beverage executives said they expect to add headcount, most estimated only in the range of 1 to 3 percent. Twenty-three percent of respondents thought they would cut headcount this year and 26 percent expected no change.
Challenges
Factors most likely to hinder economic recovery in their sector include continuing high national unemployment (64 percent), decreased consumer confidence (49 percent) and increased government regulation (34 percent).
In a related question, when asked about their current biggest expected challenges, the execs cited discounts driven by market competition (46 percent), recognizing/responding to customer needs/trends (11 percent) and increase in private labels (11 percent).
